GST registration turnover limit: ₹40 lakh, ₹20 lakh or ₹10 lakh?

There isn't one GST threshold. There are several, and which one binds you depends on what you sell and where you are. Getting this wrong in either direction is expensive — register unnecessarily and you've signed up for monthly filing forever; register late and you owe tax on supplies you already made, plus penalty.

Goods: ₹40 lakh in most states

If you supply goods and your aggregate annual turnover crosses ₹40 lakh, registration is mandatory. This is the number most people have heard.

Goods: ₹20 lakh in special-category states

In the special-category states the goods threshold is halved to ₹20 lakh. This includes Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim, Uttarakhand, Himachal Pradesh and Jammu & Kashmir.

A trader in Guwahati crosses the line at half the turnover of an identical trader in Kolkata. It catches people out regularly.

Services: ₹20 lakh, or ₹10 lakh

For services the threshold is ₹20 lakh in most states and ₹10 lakh in the special-category states. Freelancers, consultants and agencies sit here, not in the ₹40 lakh bracket — which surprises a lot of people who assumed the higher number applied to them.

When the threshold doesn't matter at all

In these situations you must register from your first rupee, whatever your turnover:

• You supply goods through an e-commerce operator like Amazon, Flipkart or Meesho
• You make interstate supplies of goods
• You are liable to pay tax under reverse charge
• You are a casual taxable person — for example running a stall at an exhibition in another state
• You are a non-resident taxable person
• You are required to deduct TDS or collect TCS under GST

What counts toward 'aggregate turnover'

Aggregate turnover is computed on a PAN-India basis and includes taxable supplies, exempt supplies, exports and interstate supplies — but excludes the GST itself. People frequently underestimate it by counting only their taxable sales, then discover they crossed the threshold months ago.

Should you register voluntarily?

You can register before you're required to, and sometimes it's the right call — you can claim input tax credit on your purchases, and business customers generally prefer suppliers who can give them a GST invoice.

The cost is that compliance starts immediately and permanently. Once registered, you file every period whether or not you traded. If your customers are consumers rather than businesses and your purchases are small, voluntary registration usually costs more than it returns.